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RTX Secures a Contract to Aid Seasparrow Missile Program
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RTX Corp. (RTX - Free Report) recently clinched a modification contract for Seasparrow missile. The award has been provided by the Naval Sea Systems Command, Washington, D.C.
Details of the Deal
Valued at $34.4 million, the contract is expected to be completed by December 2025. The latest modification will enable RTX to provide engineering and technical services for supporting SeaSparrow missile systems programs.
Majority of the work related to this deal will be executed in Tucson, AZ. This contract will serve the U.S. government as well as the governments of Japan and Chile.
How Will the Deal Favor RTX?
Increasing geopolitical tensions worldwide have prompted nations to strengthen their defense systems manifold. With rapid technological upgrades, missile defense has steadily become pivotal in a nation’s defense strategy. With the United States being the world’s largest weapon supplier and RTX a prominent U.S. missile maker, the increased missile defense adoption by nations provides the company with solid growth opportunities.
To this end, it is imperative to mention that RTX’s Evolved Seasparrow missile (“ESSM”) is an international cooperative upgrade of the RIM-7 Seasparrow Missile. It provides self-defense battlespace and firepower against high-speed, highly maneuverable anti-ship missiles in the naval environment.
Developed by the U.S. Navy and nine of the other 11-member nations of the NATO SEASPARROW Consortium, the ESSM missile is bringing transformational anti-ship missile defense capabilities to the United States, NATO and other allies. With more than 2,000 proven rounds in service or in production and another 1,500 rounds anticipated based on customer requirements, the ESSM missile will likely be supported through 2030 and beyond.
The aforementioned discussion reflects the solid demand that RTX’s ESSM already enjoys in the missile defense space and can be expected to continue to enjoy in the future as well. The latest contract win is a further testament to that and is expected to bolster RTX’s revenues in the coming quarters.
Growth Prospects
Per a report by the Markets and Markets firm, the global rocket and missile market is projected to witness a CAGR of 6.1% during the 2023-2028 period to reach $77.4 million by 2028. Such massive growth projections indicate solid opportunities for RTX, which has an impressive product portfolio of missiles like the National Advanced Surface-to-Air Missile System, Iron Dome System and SkyHunter Missile, and David's Sling System and SkyCeptor Missile.
Such a diverse range tends to provide a competitive edge for the company in the military missile market. Other defense majors who have carved out a position in the rocket and missile market to enjoy the perks of the expanding market are Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Boeing (BA - Free Report) , which specialize in developing technologically advanced missiles.
Northrop Grumman’s missile defense program includes AGM-88E advanced anti-radiation guided missiles, the Ground Based Strategic Deterrent weapon system and rocket propulsion systems. In August 2022, the company had been chosen by the U.S. Missile Defense Agency to lead the Homeland Missile Defense Program.
NOC currently boasts a long-term earnings growth rate of 2.3%. The Zacks Consensus Estimate for NOC’s 2023 sales implies an improvement of 6.6% from the 2022 reported figure.
Lockheed Martin’s missile defense program includes the Patriot Advanced Capability-3 (PAC-3) and Terminal High-Altitude Area Defense air and missile defense programs. It also manufactures the Multiple Launch Rocket System, the Joint Air-to-Surface Standoff Missile and Javelin tactical missile programs alongside other tactical missiles.
LMT has a long-term earnings growth rate of 8.6%. The stock has risen 4.6% in the past three months.
Likewise, Boeing-built and supported air and missile defense systems have protected the nation, warfighters, allies and international partners against threats ranging from intercontinental ballistic missiles to hostile aircraft for almost 25 years. Its missile and missile portfolio includes Aegis Ballistic Missile Defense, Avenger, Ground-Based Midcourse Defense and PAC-3 Missile Seeker.
The Zacks Consensus Estimate for Boeing’s 2023 sales implies an improvement of 15.4% from the 2022 reported figure. The stock has a long-term earnings growth rate of 4%.
Price Performance
In the past three months, RTX’s shares have rallied 17% compared with the industry’s 12.8% growth.
Image: Bigstock
RTX Secures a Contract to Aid Seasparrow Missile Program
RTX Corp. (RTX - Free Report) recently clinched a modification contract for Seasparrow missile. The award has been provided by the Naval Sea Systems Command, Washington, D.C.
Details of the Deal
Valued at $34.4 million, the contract is expected to be completed by December 2025. The latest modification will enable RTX to provide engineering and technical services for supporting SeaSparrow missile systems programs.
Majority of the work related to this deal will be executed in Tucson, AZ. This contract will serve the U.S. government as well as the governments of Japan and Chile.
How Will the Deal Favor RTX?
Increasing geopolitical tensions worldwide have prompted nations to strengthen their defense systems manifold. With rapid technological upgrades, missile defense has steadily become pivotal in a nation’s defense strategy. With the United States being the world’s largest weapon supplier and RTX a prominent U.S. missile maker, the increased missile defense adoption by nations provides the company with solid growth opportunities.
To this end, it is imperative to mention that RTX’s Evolved Seasparrow missile (“ESSM”) is an international cooperative upgrade of the RIM-7 Seasparrow Missile. It provides self-defense battlespace and firepower against high-speed, highly maneuverable anti-ship missiles in the naval environment.
Developed by the U.S. Navy and nine of the other 11-member nations of the NATO SEASPARROW Consortium, the ESSM missile is bringing transformational anti-ship missile defense capabilities to the United States, NATO and other allies. With more than 2,000 proven rounds in service or in production and another 1,500 rounds anticipated based on customer requirements, the ESSM missile will likely be supported through 2030 and beyond.
The aforementioned discussion reflects the solid demand that RTX’s ESSM already enjoys in the missile defense space and can be expected to continue to enjoy in the future as well. The latest contract win is a further testament to that and is expected to bolster RTX’s revenues in the coming quarters.
Growth Prospects
Per a report by the Markets and Markets firm, the global rocket and missile market is projected to witness a CAGR of 6.1% during the 2023-2028 period to reach $77.4 million by 2028. Such massive growth projections indicate solid opportunities for RTX, which has an impressive product portfolio of missiles like the National Advanced Surface-to-Air Missile System, Iron Dome System and SkyHunter Missile, and David's Sling System and SkyCeptor Missile.
Such a diverse range tends to provide a competitive edge for the company in the military missile market. Other defense majors who have carved out a position in the rocket and missile market to enjoy the perks of the expanding market are Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Boeing (BA - Free Report) , which specialize in developing technologically advanced missiles.
Northrop Grumman’s missile defense program includes AGM-88E advanced anti-radiation guided missiles, the Ground Based Strategic Deterrent weapon system and rocket propulsion systems. In August 2022, the company had been chosen by the U.S. Missile Defense Agency to lead the Homeland Missile Defense Program.
NOC currently boasts a long-term earnings growth rate of 2.3%. The Zacks Consensus Estimate for NOC’s 2023 sales implies an improvement of 6.6% from the 2022 reported figure.
Lockheed Martin’s missile defense program includes the Patriot Advanced Capability-3 (PAC-3) and Terminal High-Altitude Area Defense air and missile defense programs. It also manufactures the Multiple Launch Rocket System, the Joint Air-to-Surface Standoff Missile and Javelin tactical missile programs alongside other tactical missiles.
LMT has a long-term earnings growth rate of 8.6%. The stock has risen 4.6% in the past three months.
Likewise, Boeing-built and supported air and missile defense systems have protected the nation, warfighters, allies and international partners against threats ranging from intercontinental ballistic missiles to hostile aircraft for almost 25 years. Its missile and missile portfolio includes Aegis Ballistic Missile Defense, Avenger, Ground-Based Midcourse Defense and PAC-3 Missile Seeker.
The Zacks Consensus Estimate for Boeing’s 2023 sales implies an improvement of 15.4% from the 2022 reported figure. The stock has a long-term earnings growth rate of 4%.
Price Performance
In the past three months, RTX’s shares have rallied 17% compared with the industry’s 12.8% growth.
Image Source: Zacks Investment Research
Zacks Rank
RTX currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.